Figure out how much money you can afford to LOSE. Then trade with 10% of that, no more, until you double it. Then trade with 20% of what you can afford to lose until you double THAT. Never trade with more than half of what you can comfortably lose. Crash and burn, live to trade another day. Remember also that the amount you are putting in trade is not the same thing as the amount you are risking. Money in trade and money at risk are two different things and you need to consider both. Always trade with rules. Rules that you always follow, no matter what, and then have a plan for the day. If I had always followed my rules, I would be a lot wealthier than I am now. Never enter a trade or re-enter a trade without a good reason and a reasonable expectation of success. Stopped out? THINK before you jump back in. Look at the chart for a minute. Do a quick news scan. Look at multiple timeframes. You put that stop there for a reason, following rules and a plan. Don't throw that advantage out the window by trying to make back the few dollars you lost. If it's not a good day to trade, then don't trade. If the market is down, don't try to swim upstream against it. If you can't run with the bears in a bear market, stay on the porch and wait for a bull market. There will always be a bull market. You don't have to trade every day. When the market is falling, get on your paper account and practice trading on the short side. Don't be afraid to let a small position run overnight or even over the weekend, if it looks good. IF IT LOOKS GOOD. Check the news before trading ends for the day. Look at the hour and day charts, not just the 5 minute chart. Paper trade at least a couple of months before you put ANY real money in play. Use the same data and the same platform that you will use for trading live. You will make a lot of stupid mistakes by forgetting your hotkeys, or missing a keystroke, a slip of the mouse, or having the wrong chart selected. Spend some weeks setting up your platform and practice with it. Being able to paper trade doesn't guarantee that you will succeed in live trading, but failing at paper trading is a guarantee that you will fail at live trading. Your most important rules will be concerned with risk management. READ READ READ. Yes, most of the authors just say the same things over and over. Maybe you need to read them over and over. Particularly regarding position size, risk/reward, rule based trading. Don't try to learn too many strategies at once. ONE, or TWO at the most! Keep it simple at first. Simply trend following with any of the popular three line indicators like Bollinger Bands and going long when the price touches the lower, selling when it touches the higher line, and scaling in when it is staying above the middle line, will often give you a good day or a good couple of hours. Remember to look at multiple timeframes before you jump in. Want another good strat? Okay but you really have to practice this one. Bull Flag strategy. Works best with low priced low float stocks. (not penny stocks, though if does work for the pennies, but I suggest avoiding them in the beginning.) You need a good scanner for this. Watch for unusual volatility. Big relative volume, a big price increase in a stock that has been down in the grass for a while. Don't chase the initial flagpole! Let it top out and make sure it isn't going to do a reversal. Let it consolidate for a few bars. People are taking their profits, selling, holding the price back. After a few bars people get impatient and jump back in. Be there. Be in on it. Often there are two or three flagpoles each followed by a "flag", where the price gently waves up and down a bit sideways, before the next flagpole. Catching the second one is a lot easier than catching the tail end of the first one. The third one can be good. After the third one it is probably mostly spent. My first ever trade, with a $5k account, netted me $1200 and actually it was three trades on one stock, and of course I was then finished for the next 5 days. It was a pharma stock, I think ABIO. The pharma and health sectors can have a lot of these. Shortly after that I funded up to $50k. Did good for a few months then lost half of it but that's another story. Anyway there's your two strats to practice, one pretty intuitive and visual, the other actuall also kind of intuitive and visual, come to think of it. You don't need any more than that for a year or two. You can follow a down trend, trading on the short side, but don't try to short an upside down flagpole setup, EVER. Don't EVEN ask me why I say that. Don't waste your money on paid newsfeeds or paid chatrooms or paid courses. If you want to pick ONE or the above, be my guest, but just starting out, you have to keep your expenses down and there is NOTHING you can learn from a paid chat room or a paid guru that you can't learn from one or three of the dozens of books out there. Buy three well recommended books and study them like there is a big test on Friday. Highlight. Underline. Fold down pages. Sprinkle with sticky notes. Annotate the margins. Fill file cards with takeaway quotes. Study like you mean it. On unpaid forums like this one, try to be a good netizen and don't be too full of yourself. A little humility will get you a lot of help. Don't take it personal when a resident asshole flames you. Be above that. Don't pay for more than ONE paid scanner or chart site. I like the pro level of TradingView, myself, but the free version is good and FinViz is good and there are others that are pretty good. Your trading platform might also have a good scanner. I REALLY like TradingView though. The charts are beautiful and very customizable, with a great indicator selection and you can create your own, too. Good alerts as well, and sometimes you need alerts. Anyway, the bottom line is don't spend a bunch of money for the privilege of learning to trade. It doesn't work. Those expenses will maybe improve your trades but will cost you more than you earn. If you do give in to temptation, don't sign up for recurring membership renewals, at least. Trial memberships can be educational and entertaining but don't commit to something that will ping your credit card again a month or year from now and you don't even recognize the charge. Trading is always easier when you are trading with the market. But you can do one better than that. Instead of trading with the market, trade the market. Leveraged index ETFs such as TQQQ can be very good in an uptrend. You can also trade the Micro E-Minis like MNQ. The nice thing about futures and particularly the Micro Eminis is there is no pattern day trade rule to worry about. I suggest sticking with trades of only ONE contract at first, after of course paper trading this instrument thoroughly and exhaustively. There are some fundamental differences between futures and stocks that you need to learn and understand. Same with ETFs. With either of these two types of instruments, you are trading the index, not just one company. Of the two, ETFs are the most similar to stocks. You buy shares. You sell shares. With a futures contract you aren't really the owner of any tangible product. You put up margin but you don't actually purchase in the true meaning of the word. When you sell the contract or buy it back after selling it short, you realize profit or loss. The leverage is very strong and you can win big or lose big on a fairly modest market move, which is why you need to stay as small as possible until you have been through some really BIG moves and came out smiling. I strongly suggest going with a big name broker initially. However more fast and loose players like Robin Hood and the like are good places to get your feet wet if the broker you want to use won't "let you in" due to inexperience in trading. (Pssst... a secret. They WILL let you in. look for a course or challenge test on their site. And some guys simply lie about their experience and finances but you aren't really doing yourself a huge favor when you do that. These bars actually are in your best interest.) Learn the difference between a cash account and a margin account. For most traders, even beginners, a margin account is IMHO better because you have so much mroe flexibility, but you may decide that a cash account is a better fit. Set up a decent trading desk and be prepared to sit there for at least three hours every morning. If you have a day job, forget about day trading stocks. The time to be most active is between 0800 and noon east coast time. If you are a wage drone, you are pretty much stuck with futures or forex, both of which can make you some good bank nearly any time around the clock. Foreign stock markets might also work for you, schedule-wise. Your trading desk should have multiple monitors or at least one really big one, so you can display multiple charts. In addition to your regular internet service, set up a cell phone to use as your backup internet provider. Buy or DIY yourself an UPS, Uninterruptible Power Supply. A laptop of course is its own UPS, but you need one with good graphics capability and you need external monitors and external keyboard and mouse or trackpad. Being unable to access your account for even a few minutes can be devastating so you need redundancy in your power and internet sourcing.
its a very nice post with so many good information , got so many fine lines , thanks for your nice reply.
It is necessary to study information, create your own strategies, learn terminology and practice on a demo account.
strategies is important its a very common issue , but any kind of trading plan or strategies can be useless if there is no regular strong money management.
1:200 leverage is not appropriate for the traders who are beginners , ( according to me). i dont support to use leverage for any beginners level.
If that be the case, I’m curious you know whether you made it through the trade. I think 200:1 is a leverage that’s not suitable for everyone. Leveraging with this amount carries huge risk, which is why even if the broker offers this much an amount, it should strictly be avoided.
No offence but I beg to differ on a few points. 1. I agree to start small, but I see high leverage actually an advantage that allows you to take a lesser risk with a broker. For example, (I try to simplify here ignoring exchange rates, slippages etc)if you set aside 10k as a trading capital and your broker won't allow any leverage but a 1:1, you will have to deposit the full 10k into the account in order to trade a contract size of 10k. However, if the broker allows a 10:1, you just need to deposit 1k in order to trade the same 10k contract size that you can afford to lose. The remaining 9k is safely in your own bank account. Brokers can go broke/bankrupt too(CHF 2015 crash that took down many brokers) and your capital that you deposit is always at risk. It will only become a real problem if you have no risk discipline and deposit the full 10k to trade a 100k contract. 2. I agree backtest is a must but market conditions changed and I prefer forward test with a demo account for a period of time. 3. Backtest the strategy and if it works then forward test with demo account for 3-6 mths. 4. I am not prepare to lose big money so the first thing I learn about trading is how NOT to lose money such as maximum risk to take on a trade, how and where to play the stoploss, when to exit trade etc.. Basically beginner have to learn NOT to lose money before learning how to make any.. 5. I agree with you on this. Try to avoid market maker and personal experience the slippage is usually higher trading with them. However, there are also some decent market makers that are not out to rob you. Try get recommendations from fellow traders or friends, open small account to trade and see how it turns out. No, demo account don't count as personal experiences show that demo and live account has different execution price.